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Indian River County, Florida
<br />Notes To Financial Statements
<br />Year Ended September 30, 2010
<br />NOTE 22 - RISK MANAGEMENT
<br />General Liability, Property, Worker's Compensation and Medical
<br />The County is exposed to various risks of loss related to torts, theft of, damage to and destruction of
<br />assets, errors or omissions, injuries to employees, and natural disasters. The County established a Self
<br />Insurance Fund (an internal service fund) to account for and finance its uninsured risk of loss. Under
<br />this program, the Self Insurance Fund provides coverage as follows:
<br />Worker's Compensation
<br />General Liability
<br />Auto Liability
<br />Property Damage
<br />Error or Omissions
<br />Annual Aggregate
<br />Liquor Liability
<br />10/01/04 to 04/01/08 to 10/01/08 to
<br />03/31/08 09/30/08 09/30/10
<br />$ 600,000
<br />$ 300,000
<br />$ 350,000
<br />200,000
<br />250,000
<br />250,000
<br />200,000
<br />250,000
<br />250,000
<br />500-25,000
<br />500-25,000
<br />250,000
<br />200,000
<br />250,000
<br />250,000
<br />1,000,000
<br />1,000,000
<br />2,000,000
<br />1,000,000
<br />1,000,000
<br />1,000,000
<br />The County purchases excess insurance to cover claims in excess of the amounts listed above. There is
<br />a 5% deductible per location for property damages arising due to a hurricane under the reinsurance
<br />policy. The County has not incurred any settlements in excess of the insurance coverage listed above in
<br />the past four fiscal years. All departments of the County participate in the program. Payments are made
<br />by various funds to the Self Insurance Fund based on past experience and actual estimates of the
<br />amounts needed to pay current year claims.
<br />General Liability, Property, Worker's Compensation and Medical - Continued
<br />The County is also self insured for medical claims covering employees and their eligible dependents.
<br />As required by Section 112.081, Florida Statutes, retirees and their eligible dependents are provided the
<br />same health care coverage as is offered to active employees; however, the retirees are responsible for
<br />payment of the premiums. Medical claims are paid from premiums contributed by employees, retirees
<br />and by the County. Premiums and contributions are determined by projected claims based on historical
<br />and actuarial experience. The self insurance plan assumes all risk for claims, other than worker's
<br />compensation, up to $250,000 per occurrence. For worker's compensation, the plan assumes all risk for
<br />claims up to $350,000 per occurrence. The County has purchased a reinsurance policy to cover claims
<br />in excess of these limits. There were no claims in excess of these limits for the 2008, 2009, and 2010
<br />fiscal years.
<br />The claims liability of $7,899,000 reported at September 30, 2010, is based on the requirements of
<br />generally accepted governmental accounting standards, which require that a liability for claims be
<br />reported if information prior to the issuance of the financial statements indicates that it is probable that
<br />a liability has been incurred at the date of the financial statements, and the amount of the loss can be
<br />reasonably estimated. Estimates for claims incurred but not reported are actuarially determined and
<br />recorded. Based on the actuary's report, $2,351,622 will be liquidated over the next twelve months.
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